Cantwell to Health and Human Services Official: 'The law says that you're supposed to implement this in 2014. We're very concerned about the approach by the agency in trying to thwart this effort'

WASHINGTON, D.C. - Today at a Senate Finance Committee hearing, U.S. Senator
Maria Cantwell (D-WA) expressed concern over the administration's failure to implement the federal Basic Health Care Option on time and questioned a Department of Health and Human Services (HHS) official on the agency's support of the program.

Enacted into law as part of the Affordable Care Act, the Cantwell-championed program was designed to give states the option to create a federal Basic Health Plan Option (FBHP) in 2014. But the Department of Health and Human Services (HHS) failed to provide timely guidance to states and just last week announced it was delaying implementation to 2015.

Today during a Finance Committee hearing, Cantwell pressed
Gary Cohen, Deputy Administrator and Director of the Center for Consumer Information and Insurance Oversight (CCIIO) at HHS' Centers for Medicare and Medicaid Services, on why the agency was not implementing the federal Basic Health Plan Option at the same time as state exchanges, as the law advises.

"The law says that you're supposed to implement this in 2014," Cantwell said to Cohen. "And so we're very concerned about the approach by the agency in trying to thwart this effort."

Cantwell continued: "Can you promise this committee that the agency is not offering any deals to states to get them to take a population that they have been able to achieve more cost effective delivery system for and trying to shove them onto the exchange? As opposed to doing the Basic Health Plan?"

Cohen responded: "I think what we are doing is working with states to identify as much flexibility as we can to ensure continuity of coverage as individuals' incomes change. And to make it possible to provide premium assistance to people to purchase coverage through the exchange."

Modeled after Washington state's successful Basic Health Plan, the federal Basic Health Plan option enables states to negotiate directly with health insurers to provide high quality health care coverage at a lower cost to those ineligible for Medicaid. Washington state's program has operated for more than two decades, providing quality and cost-effective managed care for those ineligible for Medicaid but below 200 percent of the federal poverty level.

"What I'm very concerned about is that the agency seems to be thinking that the technology of the exchange is somehow the Holy Grail and you are trying to lure states out of pursuing these co-ops or Basic Health Plan options and lure them onto the exchange because you think it's some sort of magic," Cantwell said at today's hearing.

"And you are ignoring 20 years of experience. At least from my state's perspective 20 years of experience of driving down 20 to 30 percent more cost-effective delivery plans than what these individuals were able to get in the private sector," Cantwell continued. "So we don't want to throw that away. We want it to be implemented. Our read of the statute is that you are supposed to do it in 2014. And not spend your time luring people into the exchange."

Watch a video of Cantwell's entire exchange with Cohen today.

A complete transcript of Cantwell's exchange with Cohen follows:

Senator Cantwell: Thank you Mr. Chairman. You asked our witness to go at it. Don't tell us a bunch of stuff so I'm going to try and encourage the same discussion. And it kind of reminds me already, there is a maxim in politics: 'a campaign does not a candidate make.' That means you don't make somebody just because you have a campaign. And it sounds to me this morning a lot about technology does not make a cost-effective health plan. The details of how to drive down costs make a cost-effective health plan.

So I'm wondering if you can tell me why the federal Basic Health Option, which was supposed to be implemented in 2014 - in conjunction with not in the exchange but in conjunction with - isn't being implemented?

Mr.
Gary Cohen, Deputy Administrator and Director of the Center for Consumer

Information and Insurance Oversight (CCIIO), Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services: Thank you Senator and I appreciate your interest in the Basic Health Plan. I've heard a lot of interest in the Basic Health Plan as I've gone around the country and talked to different states and different groups. Given the scope of all of the coverage changes that states and the federal government will be implementing for January 1 and the value that we see of building on the experience that will be gained from those changes, we expect to issue proposed rules on the Basic Health Plan for comment this year. And make them final in 2014. So the Basic Health Plan will be operational beginning in 2015 for states that are interested in pursuing that.

Senator Cantwell: I know that even the President has kind of weighed in and said this is important. And I certainly appreciate that. But the law says that you're supposed to implement this in 2014.

And so we're very concerned about the approach by the agency in trying to thwart this effort. And so my question is can you promise this committee that the agency is not offering any deals to states to get them to take a population that they have been able to achieve more cost effective delivery system for and trying to shove them onto the exchange? As opposed to doing the Basic Health Plan?

Cohen: I think what we are doing is working with states to identify as much flexibility as we can to ensure continuity of coverage as individuals incomes change. And to make it possible to provide premium assistance to people to purchase coverage through the exchange.

Senator Cantwell: Are you artificially raising the cost to all taxpayers? By trying to lure people onto the exchange as opposed to giving them this option that's mandated by federal law to be implemented in 2014?

Cohen: No.

Senator Cantwell: You are sure of that?

Cohen: Yes.

Senator Cantwell: So if this committee asks for the specific details it could get details?

Cohen: We'll be happy to work with you to get details. Yes Senator.

Senator Cantwell: And so do you believe that you have a requirement to implement this by 2014? I get you feel you're overwhelmed by the details of technology. I got that point. But do you feel, I'm trying to emphasize a very important point here. This committee and many people on this committee are very knowledgeable about state health plans that have driven down the cost to their consumers. And so it seems as if the agency is taking I don't know how many pages out of 900, and saying that's the health plan. The health plan of the exchange. Where is the health plan of co-ops? Where is the health plan of the Basic Health Plan?

As far as I'm concerned I think the President signed all 900 pages. I don't think he said it's just this one page. And what I'm very concerned about is that the agency seems to be thinking that the technology of the exchange is somehow the Holy Grail and you are trying to lure states out of pursuing these co-ops or Basic Health Plan options and lure them onto the exchange because you think it's some sort of magic.

And you are ignoring 20 years of experience. At least from my state's perspective 20 years of experience of driving down 20 to 30 percent more cost-effective delivery plans than what these individuals were able to get in the private sector. So we don't want to throw that away. We want it to be implemented. Our read of the statute is that you are supposed to do it in 2014. And not spend your time luring people into the exchange.

Cohen: I don't think we are trying to lure people into the exchange. We have funded 24 co-ops and we are working with them to be as successful as they possibly can be. And I agree with you that they are an important element of inviting additional competition into what in many states is a very concentrated market. We agree with you.

Senator Cantwell: So you have no fear that these can stand alone and be separate?

Cohen: I'm sorry.

Senator Cantwell: You have no fear that a Basic Plan or co-op can stand alone and not be part of the exchange?

Cohen: No.

Senator Cantwell: Ok. Well we look forward to seeing the details of these other statements and proposals that you've been working on. Thank you Mr. Chairman.